Then what are the consequences due to non-performancein accordance with Bulgarianlaws?

Non-performance mostoften causesdamages to thecreditorforcompensation of whichthe legislator shouldpredict appropriate arrangements. The determination ofcompensationfor the creditorof a monetary obligation is possiblein two main versions:

1. By the law;

2. By agreement not forbidden by the law;

Compensation by the law

Herewe can distinguishtwocases:

- general rulesoflaw

- special rulesoflaw

Compensation in accordance with general rules

The principle ofthe Law of Obligationsand Contractsis thatto the creditoris due fullcompensationofthe damage suffered, which are in directconsequenceof the failure. Inthe legal doctrineit is undisputed thatobjectiveimpossibility of performanceof a monetary obligationisunthinkable.The genus of money could neverperishesandthis is explicitlyenshrined inArt.81, para. 2of Bulgarian Law on Obligations and Contracts.

The latest gives riseto affirmthe understandingthatmonetary obligation could only be delayed execution, respectively would be due onlya compensation for delay. According to the generalrules whenclaiming compensation, the creditor must provethe damagehas suffered, andtheir size.In most cases thisis associatedwith seriousdifficulties. Losses incurred, except that the creditor should toprove them, should to beidentified andtheir causalconnection withthe default. Even moredifficult on practice is toprove benefits lost.

Lots of NON EU entrepreneurs are facing with a problem when they need to stay in Bulgaria for more than 90 days (in every 180 days). This is due to both Bulgarian and EU immigration legislation procedures.

In general there are two main types of regimes depending of presence or lack of an agreement for visa free regime between their state and EU.

In the first case (when there are an agreement for visa free entrance), citizens may travel toBulgariawithout the need of entry visaand canstayup to 90 days (in every 180 days) but not a day more. Some of the countries in this list are:

In the second one visitors from countries that doesn’t have an agreement for visa free regime should hold in any case entry visa.

And so, simply running a company in Bulgaria doesn’t allow you to reside in the country. There are three main ways to obtain Residency Permit (RP) in connection with commercial or supporting activity in Bulgaria (except Investment Immigration program):

- to employ 10 Bulgarian citizens in your company;

- to act as a self employed person (freelancer);

- to act as a representative person of foreign entity registered with Bulgarian Chambers and Commerce and Industry;

In this post I will provide you with information for the third option, namely – to obtain residency permit in Bulgaria acting as a representative of a foreign entity.

This possibility is regulated by Law on Foreigners and Investment Encouragement Law.

According to the Investment Encouragement Law, the representative offices in Bulgaria is not a legal entity and can perform only non profit activities such as: identifying the market opportunities and making surveys regarding the business in the Bulgarian market, making travel arrangements for the potential clients to the head office or for the company’s representative in Bulgaria, make promotional campaigns in order to make the goals of the company known in the Bulgarian market, trying to find investment opportunities.

A representative office cannot raise invoices for services or goods and also cannot be invoiced for procured services or goods. All transactions are considered done for the foreign entity.The representative offices cannot close deals in the name of the Trade Representative Office, but for foreign company and also cannot sign any contracts. A representative office may hire personnel and enter into agreements but cannot perform any activity that can be considered commercial otherwise it must be registered as a legal entity and enroll for the specific taxes.

BBCI

What documents are required for the setup of a Trade Representative Office in Bulgaria?

The representative office must be registered at the Bulgarian Chamber of Commerce and Industry based on specific documents such as:
- the application for registration,
- the decision of opening of a representative office and the decision of appointing the person in charge for the representative office’s activities,
- the certificate of registration of the foreign company, showing existence, ownership, representation and a person that represent it, current status (Certificate of Good Standing) of the foreign entity ( and issued no later than 6 months on it’s presence at BCCI).
- the power of attorney in original for the person appointed to carry the activities of the representative office,
- proof that the Chamber of Commerce Industry’s fees were paid and the registration card for the information system of the Bulgarian Chamber of Commerce and Industry.

Nota Bene: Only legal entity may apply for TRO (Trade Representative Office) and not sole proprietor as a business form. A legal entity is a legal construction through which the law allows a group of natural persons to act as if they were a single person for certain purposes. The most common purposes are lawsuits, property ownership, and contracts.Nota Bene: All official documents that are issued outside Bulgaria should be accompanied with Apostille, (if the country of origin is a member of Apostille Convention – The Hague Convention Abolishing the Requirement for Legalisation for Foreign Public Documents) translated in Bulgaria and translation certified at Bulgarian Ministry of Foreign Affairs – consular relations.

The whole procedure of registration doesn’t take longer than a week if all the documents are accurate and delivered on time.

Once TRO is being registered applicant may proceed with the next step.

2. To apply for issuing of Visa D

The presence ofvisaD isan absolute prerequisite forobtaininga residence permit inBulgaria. Visa D could be issued only in Bulgarian diplomatic missions by permanent address of the applicant.

Application for Visa D should be submitted not early that 90 days from the planned traveling. Application is being reviewed in 45 days, following submission.

Once a Visa D is granted the applicant may arrive in Bulgaria and apply for long-term residency permit.

Visa D provides you with availability to entry multiply times in Bulgaria till it’s expiration.

3. Application for Long-term residency permit.

Applications for Long-term residency permit should be submitted in front local migration office by registered address of applicant.

Applications are reviewed within 15 days.

Certificate of long-term residency permit Bulgaria

As a result you will receive a certificate of granted Long-Term residency permit. It’s a subject of renewal annually.

Devices thatMtelsellsofleasingin most casesare codedand can workonlywith the SIMcardof the same mobile operator.

It becomes clear thatemployees oftelecom has convicted consumersthatafter the completionof the contractby which was providedencryptedmobile phoneby the company for freewould be given acodeto unlockit.

A check performed by the Commission for Protection of Consumers, however, found thatfor the providingof the code isnecessary topaythe priceindicatedin the price listof the operator. Results from the check also shows thatinformation for decodingfeewhich variesaccording to the priceof the phone (from 50 to 150 lev) is placed only on Mtel website. According tothe Commission for Protection of Consumers, it means thatusers withoutinternet accessare unable tomake informed choices.

Commission for protection of consumers

With the latest amendmentsto the Law onconsumer protection wasprovidedwhena final decisionof the Supreme Administrative Courtconfirmedanunfair commercial practice, users to have the right toterminate the contractwiththe traderconcluded as a resultof usingthis practice and toclaim compensation in front the courts.

The lawalso providesthe final decisionsof the Supreme Administrative Court tobe binding onthe civil court, the rightof consumersto seekredresslapseupon the expiration offive yearsfrom the dateof entry intoforce of the decisionof the Supreme Administrative Court, says also themessageof the Commission for Protection of Consumers.

After 8-hours of electing procedure for Chairmanof the Supreme Court of Cassation(SCC) andin lessthan two minutesvote, the SupremeJudicial Councilfailed to makea successfulchoice early today.

Nominations for Chairman of the SCC of Bulgaria

Supporting JudgeTanyaRaykovskavoted15members,sixwere“against”, and threeabstained. For JudgePavlinaPanovavotedninemembers,eightwere againstand sevenabstained. By provisions of the lawto have a valid choice are need at least17 ​​votesforacandidate. SJCwillnowhave toannounce a new procedure.Sothe choicefor the Chairman of theSCCwill be heldafterthe parliamentary vote, which is October 5.

After the vote, JudgePanova said in front mediasthat was notsurprised bythe result.“As Man, involved insuch arace, insuchevent, you musthave the courageto anticipateandanydevelopment of the procedure,” said JudgePanova.

Askedif she thinksthischoice depends onthe political situation, she saidthat a lotof it iswilling to respondthat itdependsnoted thatthe SJCitselfhas triedto schedulethe electionfor President of theSCCbeforethe parliamentary voteto demonstrateindependence from thepolitical situation.

She refused togive her opinion will she re-join the race, and mostly becauseonepossible futurecandidature againwill dependon the availability ofnominationof at leastfive membersof the SJC.

JudgeTanyaRaykovskaleft the buildingof the SupremeJudicial Councilof theside entranceandjournalistscould not even talk toher.

supreme court of cassation Bulgaria

About an hourSJC memberstookto discussthe merits ofthe twocandidates.Noticed thatin favor ofone or the othercandidatespokeonlyimportersof the respectivenominations. The other membersof the boardremained silent, orurgedtobemade​​optionalwiththe result.

Professor. LazarGruevput an end tothe debateby saying, “I want to believethat the SJC, in its decisionwillbe commensurate with theexpectations ofthe democraticspiritmanifestedbyelection of the Presidentof the SCC. Good news is thateveryBulgariancitizenwho had thepatienceto follow theprocedure,colleaguesandpeople will be ableto comparetheir choicewith thatwhichwe will do.I would like tobelieve that we willmake the right choice forSCC,goodforthe judiciary and thebestjudgesof theSCC.“

Requirements for legal protection ofcopyrighted worksincludethe work to be a resultofcreative activityand meet thepossibleexpressions and formsof creativeactivity.

Industrial propertyarealsointellectualoutcomes thatcan beinventions and utility models(objectsof patent law), marks and geographical indications, as well as companies(subject to the rights of signage), industrial design(subject to the right of thedesign) andrights arising fromunfair competition.

So what could be protected?

You have an idea for a product, logo, business, book, music, industrial design. Could the idea be a subject of protection?

Intellectual property is unique object which you have physically created – single idea could not be intellectual property, and cannot be a subject of IP protection.

Than ok, so when I own intellectual property?

1. You have created something unique, that match all requirements established into the law for an industrial design, trade mark, a patent or copyright.

2. You have bought rights over intellectual property from its initial / previous owner.

3. You have well established brand, trade name / product that could be a trade mark.

(2) Ondetermining the compensationunder par.1be taken into accountand incomeresulting from theinfringement.

Other possible actions:

Art.95(1) Wherea workof artobjects by Art. 72 ordatabases by Chapter Eleven“A” is used in violationof the provisionsof this Act, the right orthe person whohas been grantedthe exclusive rightto use,can belegally enforceable:

In view ofthe unification of jurisprudencein the presenceof conflictingcourt decisionson the issue, the President of the SupremeBar CouncilofBulgaria Ralitza Negencova sends astatement on the matterwith a requesttobegivenan interpretative decisionon the matter bythe SupremeCourt byinterpretativecase №7/30 09.2013.

Members of the Supreme Bar Council

Does itowea penalty for delayunder Article 92, paragraph 1 of Obligations and Contracts Act,when the contractisterminateddue to contractor’ fault?

The question referredwas opened due to following controversialcases:

1.First solution wasgivenby Decision№206 of05.05.20010onbyCommercial case№18/2009 of the SCC, in which isassumed thatwhenthe parties have agreeddefaultof late performance of thedebtor’sobligation,thenthe contractis terminatedby the completefailure, the debtorisliable to pay theagreed penaltybythe claimon thegroundart.92of the Obligations and Contract Act.

Considerations set outin the reasoningof the decisionare thatevenon the basis of Article 88, paragraph 1, of the OCA sentence 1termination of the contractleads to cancellation of obligations taken by the parties does not meanthat the creditoris deprived ofthe right to claim compensation for non performanceordamagesbyargumentofart.88, para 1, sentence 2 of the OCA.

2.Second solution was given by Decision №17on19.03.2010byCommercial case№414/2009 of Supreme Court of Causation. Thisdecision acceptsthat responsibilityfor damages caused bythe cancellation of acontractin the form ofpenaltydeterminedat the conclusionof the contractmay be claimedonly ifsuch adefaulthas beenagreedtocompensate thenegativeinterestviolationsforthe upstanding party, as such a possibility ofcompensationgenerallypermitted in Article 88, paragraph 1, of the OCA sentence 2. According to the court, incaseofterminationof the contract cannot enforcement being sought, norhave nonperformance andthereforeifdefaulthas beenagreedfor thepoor (slow) performance, it will not be due.

Тhe President of the Supreme Bar Councilconsideredsecondsolution for the proper one,explicitlymakingit clearthat theissue inthe twocited abovehypothesisdecisionis not the caseof termination of thecontract with thecontinuous orperiodic performancewhere the terminationis effectiveonly in the future, according to the provisionofArticle 88, paragraph 1, of the OCA sentence 2.

The argumentsforthis conclusionare as follows:

1.Breach of a contractualobligation existsin any casewhere the debtordoes not performexactlyas agreed, i.e. bothfulldefaultas wellasaccomplishinginaccurate,asthe case may beinaccuratefailurecould beboth quantitativeand qualitative, and also inrespect of time- the caseofArticle 79, paragraph 1 of OCA.

2.Breaching of contract is giving riseto theliabilityof the debtor,whichcorrespond tocertainrights of creditor. Thus, underArticle 79, paragraph 1 and paragraph 2 of theObligations and Contracts Actin case of default, the creditor is entitled toclaim from the debtor(1) or performancewithcompensation for the delayor (2) compensation instead ofperformance, butinthis second hypothesis, the debtorcan offerinitiallyduealong withcompensation for the delayifthe contractorstillhas an interest inthe implementation.

3. The forfeitis aclause into acontractthat is associatedwithpossiblefailure to meetobligationsandcompensation for damagesofnon-compliance.In this sense, the forfeitissecondaryin nature, it is always associated withanotherprimary obligationunder the contract.According tothe legal definitionof forfeitinArticle 92of theObligations and Contracts Actthiscontract termgoals, on the one hand,to ensurethe proper performanceof the obligationand, onthe other hand,serve ascompensation for the damagesof a possibledefaultwithout the need such a damageto be provedeither astypeorsize.

4. If based on nonperformance the creditor is sufferinggreater damage, he may claimcompensationfor the excess overthe agreed default-Article 92, paragraph 1, of the OCA sentence 2. But if a forfeit isexcessivecompared to theactual damageorif the obligationis fulfilledpartly or incorrect, the debtor may apply to the courtwith a request toreduceits size-Article 92,paragraph 2 of the OCA.

5. Whenthe contract isbilateral andis canceleddue to the faultof the debtor(Article 87 of OCA) according to Article 88, paragraph 1 of theOCAterminationis retroactive, i.e. retroactivelydrop out parties’ commitmentsandmutually they owereturning of given by thecontract(Article 55, Paragraph 1, Proposal. 3 of OCA). Oncethe commitments aredroppedandnotperformance is owed, it should logicallynonperformanceanddropoutobligation to notconstitute grounds forliabilityof the debtor. But the lawtakes account ofthe factthat it isthe debtor’swrongful conductled totermination of the contract, thus expressly provides thatin the case oftermination, the creditor is entitled tocompensation for damagesfromthe breach ofcontract.

6. In viewof the above,in bilateralagreements, various events of default are possibledepending on thenature ofthe obligationsand alsodependingon the different situationsoffailure-inadequate performanceor completenonperformance. Accordingly,of any such casesof default, defaulting partywould be responsible fordamage caused bythe breach, the partiesmay agreein advancewhat compensationwouldbedueasagreed on acasefordefault-fora delay penaltyand thepenalty for complete nonperformance. And ifthe law expresslyprovides for the rightto compensation fordamage caused byfailureintermination of the contract, the parties couldthereforestillat the conclusionof the contractto understandthe compensationof suchdamagesasagreed penaltyfor failure, leading to termination of the contract. This way for the correct party there will no be need to prove damage sufferedby thetermination of the contractand receivethe agreedcompensation.

7. In conclusion,applying the principle ofcontractual freedom(Article 9 OCA) parties to a bilateral contractmay agree both ascompensation forinaccurate(delayed) performanceanddefaultfor failure, leading to termination of the contract. Accordingly,in an action forthe awardofdefault, the court in interpretingthe contract andseekingthe actualwill of the parties(article. 20thOCA) should primarilyclarify whetherthe allegedpenaltywasagreedforthe case ofpoor performanceor in the event of defaultgiving rise to thetermination of the contract. In the latter case, a penaltyclausewill be implementeddespite the abolitionof the contractretroactively, becausethe possibility ofdamagesby suchbreachis expresslyprovided by law.

The Court of Justiceheldthat thesingle marketability of citizensof the Unionto choose the MemberState in whichthey wish to receivethe titleandthe Member State inwhichthey intend topractice their professionis inherent in theexercise ofthe rightguaranteed bythe European Unionfundamental freedoms.

Freedom of movement for EU lawyers

InJoined CasesC-58/13 and59/13 (Torresi / Consiglio dell’Ordine degli Avvocati di Macerata)of17 July 2014statesthat the factthat a nationalof a MemberStateholding auniversity degreeacquired in his country and later has goneto anotherMember State in orderto obtain a lawyer licenseand subsequentlyreturned totheir countryto practice legal professionunder the professional titleobtained in another MemberState is thespecification ofone of the objectivesofDirective 98/ 5 /and do notconstitute an abuse ofthe right of establishment.

EU Courtrecalls thatin order to facilitatethe continuouspractice of the legalprofession in a MemberState other than theState in which theprofessional qualification was obtained, EU lawintroduces amechanismfor mutual recognition oftitlesofmigrantlawyerswishingto practiceunder the title ofhisof origin.

And thatof courseappliesnot onlyfor people practicingthe profession of lawyer, but alsofor other professions.

Free movement of working people is a key, basal principle of the Treaty enshrined in Article 45 of the Treaty on the Functioning of the European Union and developed by EU secondary legislation and the Case law of the Court of Justice.

The European Court of Human Rights is one of the international jurisdictions with established practice recognizing the right of non-pecuniary damages to entities that deserves to be described.

Based on Art. 34 of the Convention on Human Rights, which expressly provides for the right of appeal of NGOs, in 1979 the Court recognized the legitimacy and companies.

Since violations of the Convention are awarded benefits primarily in respect of non-pecuniary damages logically Strasbourg began to recognize them and to legal persons.

Over the years, in various judgments, the Court recognized that there are non-pecuniary damage suffered by non-governmental organizations, political parties and companies.

Compensation may be simply expressed in a violation of the Convention, but there may take monetary expression.

During all these years the judicial practice in Bulgaria adheres to the opposite understanding that legal persons are not entitled to moral damages.

However and finally, in 2013 Interpretative Decision ? 4 SCC recognizes that legal persons are entitled to moral damages, at least when the legislature expressly provides.

Longstanding practice of the SCC is criticized in an article by Maria Lazarova, published in the blog Capital newspaper, in which the author recommends that it be abandoned as outdated and obsolete trends at national, European and global level.

Possible business formations is a matter regulated under Bulgarian Commercial Act. There are situated the rules with regards of incorporation, management, relation between shareholders and managers, insolvency, bankruptcy, liability and so on.

Issues not addressed in the Commercial Act are redirected to the general civil legislation of the Republic of Bulgaria.

Starting a business in Bulgaria is very easy and stress free, but which form may fit your needs. Well, that is what we will try in this post – to help you better understand the differences of possible business formations allowed by Bulgarian commercial legislation.

Normally these are business formations very similar to those known to other countries over the world. So let’s start with some general information.

19th century Bulgarian Merchants

The law defines the term Merchant as follows:

For the purposes of this Act a merchant shall mean any natural or legal person engaged by occupation in any of the following transactions:

1. Companies;
2. The cooperatives, except housing cooperatives.
3. Any person which has established a business, which in accordance with its purposes and volume requires that its activities be conducted on a commercial basis even if not listed under para 1, shall also be deemed a merchant.

Well, Who Are Not Merchants:

The following shall not be deemed merchants:
1. Natural persons engaged in farming;
2. Artisans, persons providing services through their own labor or members of the professions, except where their activity may be defined as a business within the meaning of Article 1, para 3;
3. Persons providing hotel services by letting rooms in their own home.

Every Merchant is obligated to keep accounts in accordance with Accountancy Act.

Well, finally we are ready to go with possible company formations.

SOLE PROPRIETOR (also known as SOLE TRADER)

Any natural person possessing capacity whose domicile is in the country may register as a sole proprietor, except the following:

1. who is bankrupt and his rights have not been restored;
2. who has intentionally gone bankrupt and has left unsatisfied creditors;
3. any person who has been convicted for fraudulent bankruptcy;
4. any person who has occupied the position of a manager, or an ex member of a managing or controlling body of a company that was suspended due to insolvency, in the last two years prior to the date of the decision to declare insolvency, in case there were unsatisfied creditors;

5. who had been manager, member of managerial or supervisory body of any company, in regard to which non-performance of obligations to constitute and hold stocks under the Crude Oil and Petroleum Products Stocks Act at levels, prescribed for it, had been ascertained by an effective penal decree.

A sole proprietor shall be registered on the basis of an application into Commercial Registrar.

SOLE PROPRIETOR liability is unlimited. He is responsible with all his assets, even personal – real estate, land, etc.

COMPANIES

There are two main group of companies based on their ownership:

1. PUBLIC ENTERPRISE MERCHANT – state owned or municipality

2. PRIVATE COMPANIES

PRIVATE COMPANIES

A company is an association of two or more persons for effecting commercial transactions with joint means. In cases provided by a law a company may be incorporated by one person. Companies are always legal persons – entity.

GENERAL PARTNERSHIP

A general partnership shall be a company formed by two or more persons for the purpose of effecting commercial transactions by occupation under a joint trade name. The partners shall be liable jointly and severally and their liability shall be unlimited.

A partnership’s articles shall be drawn up in writing with notarized signatures of the partners.

Each partner shall be entitled to take part in the management of the partnership’s business, except when management has been assigned with the articles of partnership to one or several of the partners or to a third party.

When taking an activity against the partnership the claimant may also name as defendants one or more of the partners. Forcible execution shall be directed first against the partnership, and, in case of impossibility for satisfaction, against the partners.

Into the Interpretative Decision N: 1 of 12.09.2013 of the SCC has been given answer to number of questions related to the powers of supervisorycourt instances in appeals of rulings and decisions ahead.

Supreme Court Judges clarify the scope of the second instance and indicate that the appeals court is not limited in its application of that when the next official interest of any party to the case.

In this sense, the SCC held that the verification of the correctness of the judgment at first instance may be given mandatory substantive rule even if its violation was not introduced as a ground for appeal.

Examining the activities of the appellate court, the SCC stated that it is not a repeat of first instance, only a continuation and therefore the appellate court did not follow its own motion made by the first instance court procedural irregularities in reporting the case.

Supreme Court Judges pay attention to the question of how are current principal positions displayed in Interpretative Decision N: 1 of 2000. Has expressed the opinion that under the new Civil Procedure Code objections to repayment and acquisitive prescription can be introduced for the first time on appeal only if the litigant due to violation of the court rules, could not have told them first instance.

Current interpretations are on when can be claimed for the first time on appeal and set-off defense of lien.

In connection with the constitution of the litigants in the interpretative decision stated that if the first instance was not constituted as a necessary party whose participation in production is required, the appellate court should invalidate as inadmissible first instance decision and remit the case to the trial court for new hearing with the participation of the necessary party.

By continuing tolistsacts ofthe appellate courton whichthe cassation instancemay control, the SCCstated thatthese arethe definitionof the appellatecourtconfirmingorder of the first instanceto terminate the proceedingsbecause oflack of jurisdictionof the dispute,butnot thoseconfirmingorder of the Court, whichwas rejected based onobjectionof lack of jurisdiction.

Shall not be subjectto appealand the definitionon the grounds of art.122of the Civil Procedure Code given ina dispute overjurisdiction betweenthe courts.